The terms of an Arctic exploration financing agreement between Russian and Italian energy majors have been ironed out following an April cooperation agreement

The race to exploit Arctic energy reserves – estimated at 13 percent of the world's undiscovered conventional oil and 30 per cent of its undiscovered natural gas – is moving forward with pace

Rosneft has signed a landmark agreement with ENI to finance geological works at three offshore Russian license blocks, it emerged this week.

The Russian energy giant, with its subsidiary Val Shatskogo, enters the pact with the Italian oil company to explore the Fedynsky and Central Barents blocks in the Barents Sea and the Western Chernomorsky block in the Black Sea.

The deal builds on last month’s agreement between the companies to share technologies and licenses with respect to two areas in the Arctic sea following a cooperation agreement in April.

ENI will provide full finance for geological works under an existing license agreement while expenses for geological exploration outside of the license obligations will be split between both in line with their stakes in the projects (ENI – 33.33%, Rosneft – 66.67%). Rosneft will not be obliged to return the investment if production does not begin.

Estimated recoverable resources at the Western Chernomorsky block stand at 1.36 billion tonnes of oil while prospective recoverable resources at the Fedynsky and Central Barents license blocks are 2 billion tonnes of oil and 1.9 trillion cubic metres of gas.

The Fedynsky block has already undergone a two-dimensional seismic survey, and nine prospective structures with 18.7 billion barrels of oil-equivalent in recoverable reserves have been discovered.

In June, Rosneft chief, Igor Sechin, said total operations in the Arctic might require between USD 250 and USD 400 billion investment –“comparable to the cost of space exploration”.

Rosneft on Tuesday said it was planning to bid for a sizeable stake in BP's Russian subsidiary, TNK-BP.